Police are interviewing a 15-year-old man who allegedly wore “full head-to-toe black military gear” while driving wildly in Melbourne’s CBD on AFL Grand Final day.

The teenager, from Knoxfield in Melbourne’s east, was Tasered, arrested and taken to hospital where he is being assessed for “mental health conditions”.

Victoria Police Acting Superintendent Wayne Newman said police were called around 8am to the intersection of Swanston and Flinders streets, outside Federation Square, where a green Toyota RAV4 SUV was driving erratically.

“A member of the public attempted to prevent the driver from continuing by throwing a pushbike towards the vehicle,” Acting Superintendent Newman said.

“Whilst this was unfolding, senior police were monitoring CCTV footage of the incident and within minutes had units on the scene.

“The male was wearing an army disposal type uniform, he was engaged by police and taken into custody. The young male has been taken to hospital where he is currently being assessed for mental health conditions,” Acting Superintendent Newman said.

The teenager had no known terrorism links and probably did not pose a great threat, police said.

Acting Superintendent Newman confirmed the teenager was armed with a weapon but would not go into further details.

He said he did not believe the teenager “posed a great threat” given the time of day and lack of traffic, adding that police were treating it “as purely a mental health [issue]”.

The Bomb Response Unit went to the scene as a precaution and the area was cordoned off while the car was examined.

The incident is sure to spark memories of the horrific attack in Bourke Street rampage that killed six people and injured dozens earlier this year.

Eyewitness Jean-Daniel Guerin posted a video to Facebook showing the all-wheel-drive travelling in reverse down Swanston Street, before screeching to a halt at Federation Square.

In the footage, members of the public can be heard shouting “shoot him” to police officers attempting to contain the young man.

Warning: video contains coarse language and violence

A witness told the ABC the man, wearing a black motorcycle helmet, got out of the car wielding a black baton and was dressed in “full head to toe military gear”.

“He took a backpack out of the car to simulate a bomb and then he was telling the cops to come for him,” Jolon Cooke told the ABC.

Mr Cooke, who was setting up equipment in Federation Square for the Grand Final crowd pouring out of nearby Flinders Street station, said the teenager had swerved to run him over.

“He dead set tried to kill me,” he said.

Another eyewitness Jason Smith recalled how the car, which had a red P-plate, was going up and down the street, doing skids and burnouts.

“The cops started approaching, then he got out of the car and he was walking in sort of an agitated state and doing circles,” Mr Smith said.

“He was all in black with a black helmet and a black backpack – looked like a terrorist.

“Then someone threw a pushbike at him, that was crazy! Then the cops eventually got up close and … Tasered him, then that was it,” Mr Smith said.